What is the Capital Loss Carryover?

[imaykut]

I have been using Turbo Tax for years and this year it populated my Income and Expenses with a Capital Loss Carryover from my 2019 tax returns.  I don't remember any of this and can't figure out where these numbers came from.  What's the best way to figure out if these numbers are correct or not?

[JohnW152]

You can deduct up to $3,000 in capital losses on your return in one year ($1,500 if married filing separately).  Any losses over that amount can be deducted on future returns as a capital loss carryover, until your loss is used up.

To see where this came from, look on last year's Schedule D -- specifically lines 16 and 21.

If your line 16 loss amount is higher than the amount shown on line 21 (pretend they're both positive numbers), you'll get a capital loss carryover on this year's return.

If you transferred data from last year's TurboTax return, your carryovers will already be populated.

[VolvoGirl]

You need to look at your 2019 Schedule D to calculate how much was carried over to 2020.  

Schedule D doesn't actually show the carryover amount. To find your Capital Loss Carryover amount you need to look at your return schedule D page 2. Line 16 will be your total loss and line 21 should be a max loss of 3,000. The difference between line 16 and 21 is the carryover loss.

If you used the desktop version or have the complete pdf of your last year's return you might have the Capital Loss CO (carryover) worksheet that will tell you the amount.

In the Online version you have to save your return with all the worksheet as a pdf file to your computer to see the Capital Loss carry over worksheet. There might be 2. There is a Capital Loss Carryover Worksheet showing the carryover from the prior year and the current amounts. Then there is also the Capital Loss Carry Forward worksheet showing the amount transferring over to next year.

[Sandyjb555]

I am very confused. We had to pay in capital gains last year for short term capital gains on real estate (paid entire balance off that was due). While we did owe capital gains, I don't consider it as we had a "loss". But when I went to start my taxes, it had a option for a capital loss carryover come up prompting me to start the form which I have no idea what that is, further line 16 on schedule D from last year has an amount but line 21 is blank. 

The lady from turbotax had me start the process to see what happened and I had to stop because it asked for info from a form that I never received and never saw, so I assumed the whole situation did not apply to me. Now wondering why this was inserted into my taxes this year if I didn't really have what I would consider a "loss" to carry over.  Can you explain this in a way that I can understand?

[HopeS]

Carryover losses on your investments are first used to offset the current year's capital gains if any. You can deduct up to $3,000 in capital losses ($1,500 if you're Married and Filing Separately). Losses beyond that amount can be deducted on future returns as a capital loss carryover until the loss is all used up.

For example, if your net capital loss in 2020 was $7,000 and you're filing as single: If you have no capital gains for 2021 and 2022, you can deduct $3,000 of the loss on your 2020 return, $3,000 on your 2021 return, and the remaining $1,000 on your 2022 return.

If you had capital loss carryover, this would be shown on the 2021 Capital loss Carryforward worksheet which is behind Schedule D (Capital Gains and Losses).

If no carryover losses it could mean a form could be stuck causing this message. You can delete these Forms by following the steps below:

1. Select Tax Tools from the menu on the left.
2. Then select Tools.
3. When the new menu pops up select Delete a Form.
4. You will see a list of all the forms in your return.
5. Find the form that you want to delete.
6. Select the Form.
7. Click Delete on the right

@Sandyjb555